Gutierrez Saltos, Aaron Fernando

W07 Business Report

Company Data

For my project, I have researched with the intention of learning more about the company or
platform called NETFLIX. I am interested in its current relationship to the company's downfall
of over 11,000 customers and employees. Thanks to the direct demand for streaming content
currently, Netflix continues to lose customers and revenue month after month. Interestingly,
I've wanted to know how a company that many people thought would never have such
profitability problems falters in a world that is increasingly driven by technology and streaming
platforms.

Company History

The company started with a DvD rental service, eventually started streaming and renting, then
only streaming. Now the company creates and develops its own content for all types of
audiences, for example, it creates series or movies based on what customers consume most
daily, such as action, drama, suspense, comedy or horror, which currently attracts a lot of the
audience. This has caused price increases in subscriptions and loss of customers.

Overview

It has major competitors such as Disney Plus, Paramount Plus, HBO Plus, Hulu, Youtube.

Competitors

 Competitors come to the fore in the 2000s.

 Best prices drive your customers away?
 Popular additional content from competitors that keeps people from re-subscribing to
them?

The initial success of netflix

 Transition to primarily streaming services.

 Increased content that viewers can choose from.

Issues

Drop in usership, employees laid off.

Rationale
Rationale

Currently Netflix is still experiencing real problems with the loss of customers and audience.

Investigative report
The method of this research is inductive in nature, since by means of surveys it intends to
qualitatively explain and identify the tastes and preferences that are evident in people
between 18 and 28 years of age attending the Cinepolis limonar movie theater in the city of
Cali, towards traditional or online exhibition, in addition to identifying how the current
audiovisual producer has been impacted by the emergence of these new windows of
propagation of audiovisual works in order to create a communicative piece which reflects the
data obtained through the research.

Technique No. 1

Participant observation: the different spaces and exhibition halls in order to know their
experiences and opinions about what the preferences of the public and the opinions of
professionals in the field of distribution and exhibition regarding the impact are that has the
Netflix online content consumption system.

Technique No. 2

Interviews: This technique was carried out through several semi-structured interviews with
consumers, teachers, and professionals in the audiovisual area of Cali in: process carried out in
the Premiere Limonar exhibition hall of the city of Cali, Autonomous University of West and Via
Web

Technique No. 3

Gathering information through surveys: This allowed us to obtain statistical data on the
preferences of the public based on different characteristics, in relation to the questions posed,
categorizing the data into different results according to the tastes and favoritism of the user.

Technique No. 4

Information gathering and documented research: The data analysis was made regarding the
similarity of data between participants, number of respondents who prefer specific
characteristics over others, between Netflix and cinematographic exhibition. These data were
analyzed according to the characteristics chosen in common and secondly, on most people
who chose a service in common, at the end we will give an account of the factors that
determine the popularity of one service over another.

DESCRIPTION OF THE PROCEDURE

Regarding the development of the methodology, it will be divided into three stages.

STAGE 1: This consists of a previous investigation through the collection of documented

information made up of degree projects, research, books, news, and different reliable sources,
which contribute to the development of the investigation.

STAGE 2: The interaction with the object of study was carried out in a passive, participant, and
survey way, which allows us to know in depth the preferences in the use of the
cinematographic exhibition service, both traditional and online, therefore, the techniques
mentioned above.

STAGE 3: finally, the results obtained by the different techniques carried out were drafted with
which a communication strategy was carried out that consisted of a video made based on the
investigations made and the analysis collected during the established time to carry out the
methodology exposed above, which served as an informative product and later an analysis
with which the current cinematographic situation is known, exactly the preferences of the user
and the traditional distribution system such as Online.

VOD OPERATION AND CONCEPT

In order to understand how the transition of online audiovisual services currently works, there
are a number of main models that are interesting to mention in order to understand their
operation and the difference between each one, identifying which model is the one that makes
I use the studio platform Netflix.
First, it must be identified that all online video applications that can be transmitted through
different devices are classified as Over-The-Top (OTT) since their services are provided through
the Internet; These are not subject to the regulatory framework of the operators, which means
that in order to enjoy 37 of these there are only two requirements: having a compatible device
and, most importantly, an Internet connection.
An OTT content provider is one that has an explicit infrastructure for the transmission and
dissemination of content, but that broadcasts its content over the Internet on various devices
such as Smartphones, tablets, or Smart TVs. However, the Operation of the transmissions is
categorized as Video on Demand - VoD, which refers to the Streaming service where the user
can choose what content to see when and where, thus breaking with the linear transmission of
content to which the user it was tied up with the traditional means of distributing information.

From Vod comes the definition of the different types of existing transmission such as online
video services in general. Vod variables are essential to understand the operation of each
service, the main ones have been established by the "kanlli" web portal in its publication "VOD
(Video on Demand): What it is and business models". (Lostale, 2018)

Subscription Video on Demand (SVOD) Refers to the subscription model, which through a
contract stipulates that the user has unlimited access to the content provided by the online
platform, as an example, this refers to types of services like netflix.

Premium Video on Demand (PVOD) This refers to those services that provide Premium or
exclusive content that, at the time of viewing the content, is still on the movie theaters or has
been withdrawn for a short time.

Advertising (or Ad-based) Video on Demand (AVOD) It is a free audiovisual consumption

model, which is supported by advertising, therefore, the user can obtain unlimited content
through a platform that promotes its service with advertising schedule. This is the case of the
YouTube platform.

Transactional Video on Demand (TVOD) Normally this type of service does not charge its users
for obtaining an account, but the user must make a payment for each content viewed.

Internet Protocol Television (IPTV) This refers to the dissemination of multimedia services
such as television and video through the network, managing a more interactive television with
the user, providing a service in which the consumer can choose the content they want see, not
only at the television level but also video on demand, that is, with characteristics to view any
type of audiovisual content that the viewer wants and at the time they want.

FRAMEWORK OF AUDIOVISUAL CONSUMPTION AND ITS TRENDS

Netflix publishes its results for the third quarter of 2019. As reported by the American network
CNBC, today we will be able to see for the last time the Netflix statistics of its consumers in the
world, Disney+ and Apple+, as will happen in both cases in November. This infographic shows
how, as of today (2019), Netflix's hegemony is undisputed in markets in many parts of the
world. According to data from the Statista Global Consumer Survey, in Spain 67% of Internet
users who consume paid services claim to have used Netflix in the year prior to the survey. In
Mexico, this percentage reaches 90% of online content consumers and is higher in Brazil.

And in the image below we can see in which countries Netflix offers more content both movies
and series, which we can see as first place to the United States as the largest consumer of
content on Netflix.
References

References
Anmuth, Doug; Kaizad Gotla,
CFA; Nam, Bo; Diana R Kluger,
CFA. 
J.P. Morgan Equities Research
Reports;
Anmuth, Doug; Kaizad Gotla, CFA; Nam, Bo; Diana R Kluger, CFA. J.P. Morgan Equities Research
Reports; New York, (Feb 10, 2014)

Netflix reported a drop in subscribers

Ojer, T. (2012) New business models in the distribution of audiovisual content: the case of
Netflix. Retrieved from:
http://www.revistacomunicacion.org/pdf/n10/mesa1/015.Nuevos_modelos_de_negocio_en_l
a_distribucion_de_contenidos_audiovisuales-el_caso_de_Netflix.pdf

Fiegerman, S. (2019) “Netflix adds 9 million paying subscribers, but stock falls” Recuperado de:
https://edition.cnn.com/2019/01/17/media/netflix-earnings-q4/index.html

Stadista: https://es.statista.com/grafico/19675/internautas-que-consumen-contenido-online-
de-pago/